The California power crisis is proving to be a lucrative deal for our Canadian neighbors--and also a looming problem

When the lights went out in California last month, cash registers rang up north. In one critical 24-hour period on Jan. 18, British Columbia Hydro supplied more than one-third of the power desperate Californians needed to stave off a statewide blackout. The rescue didn't come cheap: the utility may have earned $3 million from the deal. "It's been a windfall," admits B.C. Hydro spokesman Wayne Cousins.

In the past seven months, B.C. Hydro has earned more than $700 million by selling power to energy-starved U.S. buyers--more than twice the $290 million earned from U.S. sales in the previous fiscal year. But...